20 April 2019

Buying back shares? Sell them within two years if you’re a BVBA!

It sometimes happens that a company buys back its own shares. What does this involve and what are the consequences?

It involves the company purchasing its own shares in accordance with a specific procedure set out in the Companies Code. The relevant decision must be taken by the general meeting with a special four-fifths majority. This also automatically implies that there can be no conflict of interests, since the management body merely implements the decision taken by the general meeting.

The value of the repurchased shares may never exceed 20% of the issued capital. After the purchase decision has been taken, a non-distributable reserve is recorded in the amount for which the shares were purchased.

The company may then decide to cancel or dispose of its own shares either immediately or at a later date.

In the case of an NV it is also possible that a sale  or cancellation of the shares will never take place, but that it will continue to hold the shares. However, this is not possible for a BVBA: the company must dispose of its own shares within two years

If you are considering buying back your own shares as a BVBA, you should therefore be sure to sell the shares in time to prevent them from being declared invalid by operation of law.

Legal

Do you have any further questions about this? Then be sure to contact our advisors! Let's talk!

Related articles

Sharing your own assets with a spouse or partner: can you do it?
Optimal management Smooth transition
28 October 2016

Sharing your own assets with a spouse or partner: can you do it?

Sometimes you may wish to have your partner or spouse share in your assets, so that shares, money, a property or other items of value belong to both ...

Read more
Exceptions for the BVBA
Optimal management Tax
21 April 2017

Exceptions for the BVBA

For the BVBA, however, the law stipulates two exceptional cases. The first exception is the situation where an asset retirement takes place as a ...

Read more